University of Missouri wins court battle over intellectual property rights

Wednesday

Sep 6, 2017 at 6:20 PMSep 6, 2017 at 10:18 PM

Rudi Keller @CDTCivilWar

The University of Missouri won a court victory Wednesday when a jury awarded the school $600,000, concluding an eight-year fight over intellectual property rights of faculty members.

The jury found in the university's favor on two of three allegations — that Galen Suppes breached his contract and duty of loyalty by his actions that the university claims scuttled a deal to market a process for making propylene glycol developed in Suppes' lab. The jury found in Suppes favor, however, on the allegation that he was responsible for the deal's failure. The jury awarded $300,000 damages on each of the two counts where it ruled in the university's favor.

Suppes is a former tenured engineering professor fired by MU for reasons that included harassment of students and willful violation of university rules. The verdict came at the end of an eight-day trial.

Russell Jones of the Polsinelli law firm, representing the UM System, asked the jury for an award of $3.7 million. After the verdict, Suppes said the result was a kind of victory because the jury ruled against the university on the charge he improperly interfered with the business deal.

"Their attorney bills were well in excess of" the award, Suppes said. "It makes a huge statement for the type of university this is when they stop a grievance and file a lawsuit and don’t even recover what their attorney costs were. That is a huge statement of what this university is about."

The university defended its decision to sue Suppes in a statement issued Wednesday night by the MU News Bureau. Suppes has sued the university and 10 university employees is six unsuccessful lawsuits, according to the statement. Suppes is currently appealing a ruling in favor of the university's process for removing tenured faculty.

Under university rules, faculty who achieve innovations or create inventions while on university time or in university labs must notify the university they have made a patentable discovery and assign their intellectual property rights to the university. The university pays the costs of patenting the invention.

In return, the faculty receive one-third of the royalties and a share goes to their academic department.

The university stated the University Patent Committee met four times to deal with ownership issues for two dozen of Suppes' inventions, ruling against him each time.

"The university will continue to protect its intellectual rights, as well as those of the faculty and taxpayers," the statement reads. "Protecting and commercializing the intellectual property created by university researchers is pivotal to the growth and strength of our research and economic development programs."

In his closing argument, Jones said Suppes was motivated by greed. The sale of propylene glycol — a key component of antifreeze and deicing solutions for aircraft — made from soy byproducts was potentially worth millions annually in royalties.

“Rules are no good if they don’t apply to everyone,” Jones said.

The demand for millions in compensation didn’t make sense, attorney George Smith said in closing arguments on Suppes’ behalf.

“What the university was doing here is counting their chickens before they hatched. That entire analysis was based on faulty, flawed and unrealistic evidence,” Smith said.

Smith and James Kernell represented Suppes. Judge Gary Lynch of the Southern District Court of Appeals presided over the case.

Suppes’ disputes with MU over intellectual property rights began almost as soon as he was hired in 2001 as a tenured faculty member of the College of Engineering. During the trial, Jones presented evidence showing that he altered forms notifying the university of his patentable discoveries, filed for patents in his own name for inventions created at MU and refused to sign documents.

The university documented more than 30 occasions where he did not follow rules for assigning rights before the lawsuit over propylene glycol was filed in 2009 and another 19 afterward, Jones told the jury.

In the battle over propylene glycol, Suppes claimed that key elements of the discovery were achieved before he was hired by MU. In 2006, MU announced that it had a deal with a company called Senergy Chemical to scale the process to create industrial quantities and license manufacturers around the globe.

The deal fell apart when a Korean company, which was preparing to invest in production facilities, discovered a key patent was in limbo. The absence of Suppes’ signature on a patent application led the U.S. Patent and Trademark Office to declare the application abandoned.

Suppes also sought to market the process to Senergy’s competitors, including Dow Chemical, and claimed that a firm he created, Renewables Associates, owned all the intellectual property rights to the process.

“What in the world made him think this was OK?” Jones asked.

Suppes sought to protect all his rights and gave the university the rights due it because he was on faculty and also sought to protect rights he claimed the university did not own, Smith said.

“He may have been a pain in their rear end, but he stuck to his principles,” Smith said. “We can't fault a man or woman for doing that.”

It is impossible to know for certain, Jones told the jury, because Suppes did not testify. He used that fact as a hammer at the end of his argument to the jury.

In a civil trial, unlike a criminal trial, a jury is allowed to consider why someone failed to testify, Jones said.

‘You can infer from the fact that he didn’t get up there and testify that anything he was going to say was bad for his side,” Jones said.

Jones was not being completely truthful with the jury, Smith said. He could have called Suppes to the stand at any time.

“My job is to look at the evidence they put on and see if they've proven their case,” Smith said. “If I don't think they've proven their case, I don't need to put anybody on.”